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The relentless increase in global temperatures combined with heat waves has led to less abundant and more irregular rainfall, more frequent and severe droughts conducive to wildfires, and also more in the way of storms and floods. Not only will it rain less, but fewer and fewer people will be glad to see the rain.
Competitiveness improved during the pandemic due to lower margins, and again during the recovery due to lower relative wage growth. In practice, this has meant an implicit ‘income pact.’ In addition to reaching an agreement on how this cost-sharing will continue, it would be useful to think about a ‘productivity pact'.
One of the best surprises of 2022 has been the recovery by tourism. However, there are reasonable doubts regarding the industry's future outlook. A downturn could have major implications for the economy.
